Bitcoin price retreated below $95,000 on Tuesday, continuing a downtrend that began four weeks ago when it peaked at a record high of $109,200.
Bitcoin (BTC) dropped as the odds of a Strategic Bitcoin Reserve, or SBR, in the United States declined on Polymarket.
A Polymarket poll with over $6.9 million in assets placed the odds that Donald Trump will create an SBR in the first 100 days at 12%. The odds have been in a strong downward trend since peaking at 40% in January.
Another poll showed that the likelihood of the Texas Strategic Bitcoin Reserve Act being signed this year dropped to 38% from a high of over 60%. A Kalshi poll places these odds at 41%.
These probabilities remained low as the state senate held hearings on establishing the reserve, interviewing experts and the state comptroller. Legislators in other states, including Wisconsin, Arizona, Florida, Alabama, and Wyoming, have introduced bills to create similar reserves.
The Trump administration is consulting on whether to establish a Strategic Bitcoin Reserve. Venture capitalist David Sacks, serving as the administration’s crypto and artificial intelligence czar, has confirmed that these deliberations are going on.
One potential option is to create the strategic fund using Bitcoin seized by the government. Data from BitcoinTreasuries shows that the U.S. government holds 198,109 BTC, valued at $18 billion. The government may also acquire Bitcoin through the recently formed sovereign wealth fund.
A U.S. government SBR would be significant, as it could encourage other countries to follow suit. China holds 190,000 BTC worth $18 billion, while the UK holds 61,245 BTC worth $5.8 billion. Additional purchases could occur at a time when Bitcoin mining difficulty and demand are rising while exchange balances decline.
Bitcoin price pattern points to a surge
The daily chart shows that BTC has remained in a tight range over the past few months, sitting above the 100-day moving average.
Notably, Bitcoin has formed a megaphone chart pattern, a popular bullish indicator. This pattern consists of two diverging trendlines and typically precedes a strong breakout after retesting the lower side of the channel.
This pattern aligns with the cup-and-handle and bullish flag formations on the weekly chart, suggesting that Bitcoin could rebound in the coming weeks.
